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Deductions to Security Deposit

A security deposit refers to the sum of money typically provided by a tenant to a landlord when renting property or entering into a tenancy agreement. Typically, most residential tenancies in Singapore require deposits that are the total of 1-2 months’ rent but may be negotiable depending on the individual landlord. A security deposit is typically taken as a form of insurance for landlords so that in the event a tenant causes damages or breaches the terms of their lease agreement, the landlord will be able to be compensated for the loss without having to resort to going to court. Even though the security deposit must typically be refunded come the end of the lease, there have been many instances wherein a landlord illegally withholds the security deposit – in this article; we will discuss the scenarios in which your landlord is legally entitled to retain your security deposit.

Your landlord will be legally entitled to retain or deduct from your security deposit in accordance with the terms of the lease. These scenarios and stipulations would usually include:

When there is outstanding rent at the end of the rental period

Whilst is legal for a landlord to use the security deposit to offset any outstanding rent amounts at the end of the tenancy, tenants should not purposefully withhold payment of rent towards the end of the tenancy so as to compel the landlord to use the security deposit in lieu of rent payments. Tenants should also take note that landlords can commence legal action in the event costs of repair to damage of property cannot be deducted due to the security deposit being used to cover the unpaid rent.

 

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When there are unsettled utility bills

To cover any cleaning costs of restoring the property to a clean, rentable condition

To repair any damages or to replace property or fixtures in excess of ‘fair wear and tear.’


Most tenancy agreements will include a clause that requires tenants to keep the property and any furniture and fixtures provided in the same condition as when the rent period started, save any deterioration due to ‘fair wear and tear’. Resultingly, there should be no deductions from a security deposit to remedy ordinary wear and tear. However, many disagreements stem from the differences between what landlords and tenants would consider normal wear and tear. Normally, issues such as small marks or the natural discolouration of walls should not be borne by the tenant’s security deposit. Sometimes, tenants and landlords also disagree on the original condition of the property. It is therefore very important for tenants to properly document the condition of the property before they move in. Tenants should document any defects in the property and have their landlord acknowledge said defects in advance of signing the tenancy agreement. This will minimise any potential problems of landlords and tenants not agreeing on the damages incurred.

In the event, your landlord does not return your security deposit even when you have fully adhered to the terms in the tenancy agreement, ask your landlord to substantiate his decision. If he refuses to do so or his reasoning is unsound, consider sending a letter of demand or applying the Small Claims Tribunal if the lease is a residential lease for a period not exceeding two years, the value of the claim is less than $10,000 and if the claim is made within a year of when the security deposit should have been returned. Tenants should also check if there is a dispute resolution clause stipulated in their lease agreement and if so, they will have to follow the process laid out in the agreement.

If you have questions on the returning or deduction of security deposits, do contact us at Emerald Law where we have a team of lawyers who are experienced in property matters and regularly act for tenants in claims against their landlords.

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Our specialised lawyers and their team are standing by to assist you. Our first consultation is free.

The information contained within this website contains general information about our lawyers, Law Firm and procedures and is not intended to constitute legal advice.
Any person viewing or receiving information from this Website should not act or refrain from acting, on the basis of any such information without first seeking appropriate legal advice.
Please consult a lawyer for specific review of your case and advise. 

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Joint Managing Partner

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